Are Trump Accounts Worth It? (And What’s Actually Better)

Transcript:

On this episode of the Personal Finance Podcast, we're going to tell you everything What's up everybody?

And welcome to the Personal Finance Podcast. I'm your host, Andrew, founder of Master money.co. And today on the Personal Finance Podcast, we're going to be diving into an account that was just created that could benefit your kids.

If you guys have any questions, make sure you join the Master Money newsletter by going to Master Money And don't forget to follow us on Apple Podcast, Spotify, YouTube or whatever your favorite podcast player is. Cannot thank you guys enough for following the show.

And if you're getting value out of the show, consider leaving a five star rating and review on Apple podcast, Spotify or your favorite podcast player. Now today we are going to be diving into Trump accounts. And when we go into this episode, I'm going to start this episode off by saying this.

This has nothing to do with politics. And if you are utilizing this as some political way for you to forego doing this, that is completely fine and that is your choice. But at the same time, I want you to understand, I don't care if you are liberal. I don't care if you are Republican.

I don't care if you fall into the middle and you are independent. This show does not get political. Now, if there's something that's happening in politics that causes harm to you, my audience, my listeners, I'm going to speak out about it. But we don't get political at all on this show. Why? The reason for that is because my entire goal is to serve you.

And all I want to do is serve my audience. I want you to have the best possible opportunity to build wealth for you, to build wealth for your spouse, to build wealth for your family, to build wealth for your parents. I don't care who it is. Our goal is to help you build generational wealth and my goal is to serve you.

And so the reason why we're diving into this topic it's today is because this can benefit you. If you don't want to take advantage of it because you would disagree with something on the left or something on the right, then you don't have to. But at the same time, there are some benefits here that can really help you, especially if you have kids on hand.

There is free money to be had here. There is opportunity to move this money into a Roth IRA when your child gets older, which we're going to talk about one of the best tactics for this. But if you feel as though you are not going to do this because of political reasons, that's fine. Skip this episode, move on to the next episode if you want to.

But I am going to talk through exactly what this account is and why it is so incredibly important. Listen, I truly appreciate every single one of you. I love every single one of you, and I want to serve you. I want to make sure that you have the ability to build wealth. What I do is I help people go from having a messy life.

They maybe they have a messy financial life, or maybe they're just trying to figure things out, or maybe they're trying to fit together and put together certain pieces. I help them put those pieces together and then I put them on the path to financial freedom because I believe every single one of you can become millionaires. And secondarily, I believe every single one of you can have financial freedom and the most valuable asset that you can have in place is financial freedom.

But you can also give that to your kids. You can also give the opportunity to your kids to get a head start in life that you never had. You may have come from nothing in life. And most of you out there listening to this podcast probably came from nothing. And I think that's great.

You know why? Because most of the time, people who come from nothing, they're the ones that work the hardest and they earn it. They earn it when it comes to getting to the next level. They're the scrappiest. They're the ones that stay the most disciplined. They're the ones that get after it. Why? Because they never had it. They know what it takes to get there.

And you are one of those people. I know you are one of those people. And I'm going to give you these motivational speeches more and more because this is what this is all about. This is what the show is all about, is we want you to have the opportunity to build wealth. You may have a lot of wealth right now. We have a lot of really wealthy people who listen to this show. We have a lot of high earners who listen to this show.

You may have nothing at all. We have a lot of blue collar workers who are just getting started. We have a lot of entry level job workers who are just getting started. It doesn't matter where you are. We want to come together as a team to learn how to build wealth together because money is, no matter how much you like, it is in every single part of your life.

It is a part of the decisions that you make. It is a part of your psychology. It is a part of your emotions. It's going to cause stress in your life. It's going to cause anxiety in your life. It's going to cause marital problems in your life. It is going to cause all these different things. But you can eliminate all those just by understanding how to build wealth.

So I'm going to teach you today how the Trump accounts work. I'm going to teach you exactly some of the ways that you can use them to your advantage. And I want you to use them to your advantage, especially if you have kids. If you don't have kids, this is not going to pertain to you either. But if you do have kids under the age of 18, this is going to be something I want you to follow along with.

OK, so Trump accounts, what are they? These are accounts that allow you to contribute money to your kids every single year. Now they work similar to like a Traditional IRA or your 401K and all those different things. Now, as of July 4th of this year, the government literally is handing your kid $1000 in free money.

So here's what we're going to be covering today. OK, We're going to talk about what Trump accounts actually are and spoiler alert, like I already said, it's a Traditional IRA in a costume. We're going to talk about the free money, who gets the free money, and if you are not taking advantage of the free money, I don't know what to tell you and the deadlines. We're going to talk about eligibility and key rules.

I'm going to talk about the tax benefits and the one catch that people most misunderstand. I'm going to talk about the hidden wealth building play, which is this is the fun part. There is one thing that most people are not talking about that I think you need to know when it comes to these Trump accounts on a way to get this money into a Roth, which is really, really powerful.

Now that you have the loophole with the 529 to get money into a Roth and you have the ability to get this money into a Roth, Boy oh boy, your kids could have a big old Roth at one point in time. I'm going to talk about who should not use this account because this is not for everyone. And the exact steps to open one today if you do want to open one.

So what is a Trump account? Let's talk through this first. So officially, a Section 530, a account is the technical term for this. You don't have to memorize this. You don't have to know that, but it was created by the One Big Beautiful Bill Act and it is a new type of Traditional IRA built for kids under the age of 18.

So those of you who don't know what a Traditional IRA is, this means money goes in that you do not pay taxes on, it grows. And when you pull the money out, you have to pay taxes on those dollars. Then at some point in time, always remember this Uncle Sam is going to want his money. And so you want to make sure that when you pull this money out, you understand the tax implications.

And it's going to be when your child pulls the money out, you understand those tax implications. Now, this is built for long term retirement money. That's the goal with the Trump accounts. That's the reason why they're creating these is to get a head start when it comes to this money. This is not for college, this is not for a car.

Those are very different accounts that you can open if you do have those goals for your kids. This is for long term retirement. So let's talk about the free money because I think that's what most people want to know and most people want to understand, hey, who gets this free money? How can I get some of this free money?

And some of you may have already gotten free money. We've talked about this in Master Money Academy months ago when it was first announced, talking to a lot of our students in Master Money Academy saying hey, you need to open one of these because the free money is coming and you need take advantage of that. And a lot of our our students have been getting that free money which has been absolutely awesome.

So the $1000 government seed is a one time deposit, but this is only for children who are U.S. citizens born between January 1st, 2025 and December 31st, 2028. Now my youngest daughter was born October 30th of 2024.

So I missed this by just two months. So I can't take advantage of the free money in the 1st $1000 seed. And so many of you may be saying, OK, well, first, if you have children that are going to be born between those years, 2025 to 2028, maybe your wife is pregnant right now and you know that this is coming in the line.

It is a absolutely take advantage of that 1000 free dollars. I don't know how else to say this. It is free money, literally free money. Now everything always comes with a catch. The comment that I always see under people's Instagram posts or Tic Tac posts when they're talking about the free money when it comes to this.

OK, but it's free money coming to you. Otherwise you don't get the free money. So which one do you want? Taking advantage of the free money is something you should be doing. OK, number 2 is there is also free money coming, which is the $250 Dell gift.

So Michael and Susan Dell from have a foundation, you know, Dell Computers, that's who these folks are and they are funding $250 for up to 25,000,000 kids aged 10 and under in qualifying zip codes. So the catch is these kids must have been born before January 1st, 2025.

So it is the consolation money for kids who just missed the federal seed window. So you can check your zip code to see if you fall within those lines to take advantage of this. Now, neither of these are going to count against your own contribution limit. These are stacked on top because this account does have contribution limits, which we will talk about in a second.

Let's talk about the $1000 seed for a second, because if you miss out on this money because you feel as though you just don't want to take this money, then let's talk about what happens. A $1000 seed alone invested at a 7% rate of return, which you know, that's pretty conservative for me to say.

Your boy likes to talk about a 10% rate of return. So at a 7% rate of return left untouched grows to roughly $3380 by age 18. You may be saying to yourself, what do I care about $3380 by age 18, but it can reach around $490,000 by age 65 just by taking the free money.

Just by taking a free $1000. Now, this is the power of investing for your kids right away, early and often. And if you've ever heard me talking about investing for your kids, one of the first things I always wanted you to do, and I've been saying this for years, since 2020 is when your baby is born, put $1000 into a taxable brokerage account for them.

Why? Because it can grow to $500,000 by the age of 65. And if they leave it in that account, boy, oh boy, I'm pretty happy Mom and Dad gave me that, aren't I? Some of you may be in the background right now saying, well, $500,000 at the age of 65 is not going to be worth anything.

Boy, oh boy, does that fire me up. You know what else is worth nothing? 00 dollars is worth nothing. So I think $495,000 is a little bit better than $0.00. And I think when we talk about this kind of stuff, the objections are absolutely incredible when it comes to this stuff.

Now, if you don't want to invest for your kids because of a principal reason, I get that, because you don't want to spoil them. Maybe you grew up spoiled or you had friends who grew up spoiled and you don't want to give them any money whatsoever. That's a different story. That's a different parenting tactic, and that is a different thought process.

I commend you for that. I respect you for that. But if you just don't want to do this because you feel as though $500,000 is not going to be worth as much as it's worth right now, my friend, come on. We need to reframe our thinking. I want to help you and I want to help your family. That's my goal.

That's all I'm trying to do here. And so when we think about this, take the free money. Please, Please take the free money. That's all you got to do. All right, next. Now, who is eligible under these key rules? Because we need to understand eligibility when it comes to who can actually open a Trump account.

OK, so anybody under the age of 18 can actually open one, but a child must have a valid Social Security number and be under 18 on December 31st of the year that you open it. And you can only have one account per child, obviously. Now, who can open it? A parent can open this, a legal guardian can open this, a grandparent can open this, or even an adult sibling can open this account for the kid and the IRS Form 504547.

Now you can open this via the IRS Form 4547 or on the online portal Trump accounts.gov. Now, for those of you who haven't seen Trump accounts.gov, there's also an app. By the way, it is a slick website. Why is it a slick website? Because Robin Hood is the one behind this. Robin Hood is the one that is is working with all this stuff and it is a really, really nice experience.

Robin Hood probably has the best experience overall. They have sports gambling on their app, but they probably have the best overall app experience in the way that you can actually invest your dollars. And so it's one of those things that they have a pretty slick website there. Now, the contribution limit, remember we talked about, OK, well the thousand free dollars doesn't count towards your contribution limit.

Well, this is gonna be $5000 per child per year from all individual sources combined. So your grandparents can contribute, the parents can contribute, some siblings can contribute. Your uncle Rico who can throw a pigskin over the quarter mile over the mountains, he can contribute to all these people can contribute to this account if you want them to, and no earned income required.

So they don't have to go out and earn income like you do with a custodial Roth IRA. They don't have to have that earned income available to them. This is the whole reason that you can fund this from birth is you can take advantage of this and you can contrast it with a normal Roth IRA. Now an employer can put in actually $2500 per year.

So some people don't know this, but you have the ability to either ask your employer if they will add this benefit at $2500 per year and that counts inside the $5000 cap. So this is worth flagging for any business owners that are out there or high earners who are not rich Jet, you know, or any high earners out there.

If you own a business, you can actually put $2500 per year in this account from your business. So guess what your boys gonna end up doing. I've got a business, I've got 3 kids. I am going to be contributing to this account from the business as the employer $2500 per year for my kids.

Now I can also put my kids on payroll and if I put my kids on payroll then they're going to be a custodial Roth. But guess what? My kids are 75 and 1 1/2. The only like thing that I can think of my my 1 1/2 year old to do is maybe some baby modeling and I don't want to put her on screen.

So in reality, this is a great workaround. If you do own a business or you have a side hustle that makes enough, you can actually contribute to these accounts if you have an LLC Really, really cool stuff. And I think that's a great add on for some people out there. Now here's one thing. I love the fund that they put this money in.

So when you contribute to a Trump account, they put it in a wonderful fund, so they put it into SPYM. I'm gonna pull it up right now, OK, And I'm gonna go and just kind of evaluate this really quick so that you can see exactly what SPYM is all about. It has a very low expense ratio and it's investing in the S&P 500.

This is the state St. portfolio of the S&P 500 ETF, very similar to a VOO. If you're a VOO investor, a lot of you out there are very similar to an SPY. But this is SPYM. It is a very low cost ETF that invests in the S&P 500 and the beautiful thing about this is that SPYM has the lowest cost in ETFs out there for the S&P 500.

You know, I absolutely hate and cost when it comes to these index funds and ETFs and when they start to add some of these costs in, it is one of those things that drives me up a wall. SPYM doesn't have that. So the beautiful thing about this is your money automatically gets invested into SPYM right off the bat and that is something worth just the 500 largest companies in the stock market.

If you don't know what an ETF is, it stands for Exchange Change Traded Fund and it's just investing in the 500 largest companies in the US Apple, Amazon, Google, NVIDIA, these massive companies that you all know very well. That's what you are investing in, all 500 of them. So it's a diversified portfolio long term.

Now here's the cool thing is that there is some investment restriction in here. So funds must sit in low cost index funds or ETFs tracking the S&P 500 or a similar mostly US index with a fee cap of 0.10% and no leverage. So it is simple and it is cheap by design.

They are teaching to invest in a very simple similar way that we teach here when it comes to the personal finance podcast, Master Money Academy and Master Money. So this is what we teach is low cost index funds that just invest in a broad base of funds. OK, Now there is a lock up in growth period that runs from birth to December 31st of that year before the child turns 18.

During that time you contribute, but you generally cannot withdraw during that time frame. Now they can account converts on January 1st of the year that the child turns 18, not on their actual birthday. So a December birthday still flips on January 1st. That's just extra caveats that you need to know.

I'm going to try to give you as much as possible in this episode. So because you know everything about these accounts, you're going to be the most well versed person about these accounts by the end of this episode. And that's my goal with this. So that's going to be some of who is eligible and some of the key rules in place. Again, some of the key ones are $5000 contribution limit per year.

Employers can put in $2500 per year, but it's going to count towards that contribution limit. The $1000 that you get in free money does not count towards that contribution limit. So these are just some of the key rules that you need to make sure that you have in the back up your head.

Now let's talk about the tax benefits here and the tax benefits when it comes to investing in these accounts long term. OK, First is this is not a Roth IRA, OK, Not yet. So this is not something where the money is going to come out tax free contributions made directly by parents, grandparents or other individuals.

When those dollars went in, they were after tax dollars typically. So that becomes the basis, OK? That becomes the basis of where this starts. What gets taxed is all the growth. So all the money that grows. Let's say you have this these dollars invested over that time frame and you put, you know, $1000 in and it grew to $500,000.

Well, $499,000 will be taxed because of that growth has not been taxed yet. Now the money that your parents put in or the grandparents put in, that's already been taxed, OK, So you don't have to worry about that. That's gonna be the basis. Now after 18, it behaves like a Traditional IRA. So a 10% early withdrawal penalty, meaning if they want to pull this money out to buy a brand new Ferrari or Lamborghini, they're gonna have to pay 10% on that money.

This is a risk that I think some people need to consider because when you put money in a Trump account, it becomes your child's money after the age of 18. And so this is something that I seriously considered when I was thinking about investing for my kids. The reason why my kids money is in a taxable brokerage account is because when I keep it in that taxable brokerage account, I have full control and I put it in my trust and they get this money at certain ages so that they can utilize this money when they want to.

But if it's in a Trump account, they get this money at 18 and it is fully theirs. If they want to go blow it all and pay that 10% penalty and do something stupid with it, they can absolutely do that. And so I want you to make sure that this is one of those areas that you consider when you are thinking about opening these accounts.

If you have a knucklehead that is under your roof, you just want to make sure you're thinking about that, OK. A Trump account used for college is taxable as ordinary income also. So there is an education exception, but it's honestly, if you're going to use and save for education, use a 529 account.

That's what we teach here is we want you using a 529 plan. I mean, you know, do the pros and cons, do your own research, yadda yadda yadda. But a 529 plan quietly wins for pure college money. That is what I think most people need to realize. The only reason why you'd open a 529 is to save for college. That's the only reason.

OK, you can roll $35,000 of the 529 into a Roth IRA if you want to, but there's some rules and parameters around that. So you need to understand those rules. So that's part of your out. If your child does get a scholarship or they decide they want to be a plumber or electrician, you can also use it for the trades.

So there's a lot of outs when it comes to a 529 plan now, but it is one of those things that you just want to make sure that you understand the tax implications of this. Your child will have to pay taxes when they pull this money out on the growth of that money when they're, you know, at retirement age. So this is just something else to consider. Now here's the fun part.

OK? This is the fun part about the Trump account, and I think most people need to hear this. If there is a hood, what I call a hidden wealth play, which is their Roth conversion window. This is the part that is the most misunderstood portion of the Trump account and the part that you can really get a lot of money in your kids Roth IRA and pay minimal taxes on these dollars.

And boy, oh boy, is this fun. Now let's talk about this. Let's talk about this Roth conversion window. So first, let's set this up, OK, A Trump account is not a Roth. Some people have for some reason, have this misconception that it is a Roth. It is not a Roth. But once your child turns 18, they can convert the Traditional IRA to a Roth IRA.

So why is this huge? Because this is a legal backdoor into the Roth that does not require the child to ever have earned income. So right now to have a Roth IRA when you have a child, even if you want a custodial Roth IRA where your parents are are working on it with you, your child has to have earned income to contribute to that Roth IRA.

And if they only earn $2000 in a given year, you can only contribute $2000 in a given year. If they earn $5000 in a given year, you can contribute $5000 in a given year all the way up to the contribution limit that everybody else has, which is $7500 per year. And so because of this, this is just makes it tough for a lot of kids to be able to contribute to a Roth early, but with a Trump account, and this is what I plan to do with it.

OK, You can contribute money to your Trump account, OK. Then there is a legal backdoor Roth that you can do because your kids don't have earned income. That is OK. And this was not possible before. It was not possible to do this before. But now you can convert during the low income years. So let's say for example, your child turns 18, they go to college and they really don't have much income.

Now you got to check with student loans, you got to check with all these different things. Then you got to check with FASFA, you got to check with scholarships, you got to check with student loans to see what is going to be qualified as income if they do go to college. But let's say for example, your kid goes to be age 20 and all of a sudden, you know, they had, they're going to college and maybe they have a couple of things that are going to be counted towards income, but it's their income is pretty low.

Then they get to 21 or 22, their income is low in those years. Then they get their first entry level job and their income is low again. Those are some prime years to do a Roth conversion. OK, Which means you take money from the Trump account and you convert it to a Roth IRA and you were going to pay taxes on your income in that given year.

Well, if your income is low, you're not going to be paying much in tax and could be all the way down to 0 if you do this at the right time, if you time this correctly. So this is a really, really cool opportunity that I think a lot of people need to understand. So let me give you an example for 2026. The 2026 standard deduction for a single filer is $16,100.

So a young adult with little other income who is not a dependent, they can't be a dependent of you could convert up to that amount and owe 0 on federal income tax. So let's say there's $16,000 in their Trump account. By the time they turn to age 18, they are not your dependent anymore.

So you don't claim them as a dependent. They are a single filer. Now you can convert that money over up to $16,100 in 2026. Now there's a trap that you must be warned about when we talk about this, OK? And it's called the kiddie tax. Now if you've never heard of the kiddie taxed, this means that unearned income including a Roth conversion over $2700 can get taxed at the parents rate as high as 37% if the kid is still a dependent or a supported full time student.

So if you're a full time student, I wouldn't do this when you're a full time student, but also if you're a dependent on your parents tax returns, I still would not do this. But this can make a lot of sense when you're when you turn 22/23/24 in those early years when you have your first entry level job and maybe you're not making a lot of money right away, then this is not even a question.

It's a great move to look into because you can move this money into a Roth. Then you get that tax free growth. So you paid 0 taxes on the money across the board here. Think about this money's in the Trump account, OK, you have this basis, this money grew. Maybe it grew $15,000. OK, so the growth of that $15,000, you get to be age 23, you graduated college, you got your first entry level job.

You're making thirty $40,000 per year. Or maybe you took six months to try to find your job 1st and so you're making half of that. Well, then all of a sudden this money can be converted over and you're paying little to no income tax on those dollars inside of the Roth IRA. You convert it over and then boom, that money was barely, barely taxed whatsoever and then it grows tax free for the rest of your life.

You can pull the money out tax free and a Roth. Beautiful. OK, so the safest move is to wait until the child is like around 24. Then it's not even a question if you should convert or not. OK. So parents or grandparents can gift the conversion taxes. So if there are taxes on the conversion, they can gift it to the child.

This is another tax loophole. And the 2026 annual gift exclusion is $19,000. So covering a modest conversion bill is easy to do. Inside of that $19,000. It'll be even higher over the course of the next couple of years. It goes up pretty much every single year. And so that is something that you also have the ability to do.

There's triple tax loophole suggested in here, which is kind of cool. So this is a really powerful strategy. I think, you know, skipping the college years because that can be the Kitty tax for the years. But considering researching this and looking deeper into the opportunity that you have available to you to do a Roth conversion can be really, really powerful.

So what am I doing with this account? When should you use this to build wealth? When should you not use this to build wealth? Let's dive into that next. All right, so how to actually use this to build wealth? Well, rule #1 is to take the free money always.

If your kid qualifies for the $1000 seed or the $250 Dell gift, you need to take advantage of that. Again, it is free money. I want you to take advantage of as much free money as you possibly can. This is why we tell you to do 4 O 1K matches, all those different things.

It's free money and do not turn down free money. You're just, I mean, come on. If you're turning down free money, I don't know what to tell you rule #2 it's one thing you could do is if you're like, I don't want to contribute to this account every year. I don't want to have to, to remember to contribute to it. You could front load it.

So you could front load the account. Let's say your child is born, they get 5000 bucks. You could front load this Trump account and really start to grow this in a way that makes a ton of sense or in a way that really could be a, an interesting way to, to build wealth.

So a $5000 a year from birth at 7% is roughly $182,000 by age 18. And of that about $90,000 is tax free basis and only about 92,000 is taxable growth. So when you look at something like that, if you are front loading it and letting it ride or you're just trying to grow this money over that time frame, you could really get some serious cash on hand.

Because once you just let the money front load and and grow, it can really change your, your child's life. And if you could do those Roth conversions, boy, oh boy, that's gonna be something. I mean, somebody, here's the thing about these accounts is somebody's gonna figure it out. They're gonna figure out a way to really get somebody to coast FI or get somebody to a position where they don't have to worry about retirement ever again.

Because they maxed out these accounts and maybe they went like a couple years in a row with low income years. Maybe they were working at a business or they were just forgoing some of the expenses that were on hand and they're going to figure out a way to get these accounts really, really big. These Roth accounts. There's, there's a lot of loopholes here that you can use that.

I think a lot of and they're, they're called loopholes. I mean, everybody's aware of them. The IRS is aware of them. They have documents on this. Everybody's aware that you can do this. So it's not something that's just like you're doing this under the radar. It's a loophole. It's a back door thing. This is a black market thing. Now, everybody knows you can do this.

This is just partially understanding how money works and understanding what you should be doing Now rule #3 is to convert this money methodically. Because I am going to be using this to convert over to the Roth when my kids are younger and I'm going to be contributing from the business account. A lot of, you know, at least half of it every single year.

And so because of this, let's say that you spread the Roth conversion across several low income years, let's say from ages 22 to 26. You start to spread this money out over that time frame so you never spike into a higher bracket. That can be really helpful. And here's the big thing I want you to understand, $5000 a year from birth can grow to $3.3 million tax free by the age of 60.

That's roughly a 30X return from what you actually put into this account. Now for those of you who are FASFA minded, if you were trying to think through financial aid and those types of things, because it gets retirement account treatment for financial aid, it does not wreck need based aid the way a UTMA can. A UTMA can wreck your need based aid because it has their name on it, which is a downside to a UTMA that I haven't talked about yet, but it is a downside.

And so that is something that you definitely want to make sure that you're looking deeper into as you start to think about this now. When should you not use this? When should you not use a Trump account? Because if you want to keep your credibility, this is not a free lunch for every single family that is out there. If your kid has earned income, I would say the custodial Roth IRA is generally just a stronger move because you already put money in that's been taxed when your kid doesn't make much money and so they aren't being taxed much at all.

The money it grows tax free and you can pull the money out tax free. So because the growth is tax free and you can pull it out tax free, Trump accounts are not that way. Then this is what we cause. Ultimately we want to get the money into a Roth IRA anyway. So if you could do a custodial Roth because your kid has earned income, that is a much better account than doing something like this.

Now for pure college savings, a 529 is going to win for pure college savings. And the cool thing about that is based on secure Act 2 point O under the Biden administration, they put in a caveat there that allows you to roll $35,000 from the 529 into a Roth.

So let's think about this for a second. We have Trump accounts that we can get money into for our kids. We have 520 nines that we can get money into for our kids, and we can roll 35,000 from the 529 and we can roll a lot more from the Trump account into a Roth IRA later on down the line.

There's some opportunity here, my friends. There's a lot of opportunity here to really make your kids wealthy so that they can focus on the things that they actually want to do. So if you're trying to find a way to kind of help your kids get to retirement, they have money already there, that's kind of in a spot where it's just going to help them long term.

There's some opportunities here. Now, if you don't want to do that, obviously don't. Nope, more power to you. But if you do want to do that, there's a lot of opportunity here that I see that I am going to be doing a lot more content on in Mastermind Academy and talking through how you can use this stuff. So I just want you to know that, OK, Now the real edge with the Trump account is, is that if you fund from birth, you don't need any earned income, plus you have this conversion runway.

So those are the ways that I would use it. Plus you can contribute from your business. So if you do have a business or an LLC, you can contribute from there. This is not tax free growth out-of-the-box, obviously. This is something that you can really make a huge, huge dent, a huge benefit.

Now steps to open one today. OK, first confirm eligibility. Make sure your kid is under the age of 18, they have a Social Security number and check whether they hit the citizen plus birth rule for the $1000 siege just to see if you get the free money and then gather your child's info. So gather their Social Security number and your details as the parent or guardian and then file the election IRS Form 4547 or just go to trumpaccounts.gov.

That's where I would go is just go to trumpaccounts.gov. Super easy, super slick website. You will understand how to use it and then you activate it. So the Treasury sets up the initial account, then rollovers to a provider like Fidelity or Schwab become available after the launch. So after you launch this, you can roll it to Fidelity or Schwab or wherever else you want to go and then you fund it.

So see money lands for eligible kids and then you set your contribution plan up to $5000 per year. So you can set up a contribution plan which is automatically goes in, you know, I love automations here. So you can set the up this automation and then you pick the investment. So you can choose low cost US index fund option or leave it alone.

And you can calendar the big date. So every year on January 1st of that year, when they turn 18, it flips and you can start planning on the low income Roth conversion years before they actually arrive at age 18 if they don't go to college. And if they're not in college full time, you can start to do the Roth conversions at age 18.

If they are going to college full time, then just wait till after they finish and then you can figure out the Roth conversion window or plan if you're going to go that way. So a lot of really good stuff here, lot of really great stuff to utilize the Trump account here. And I think there's a lot of things that you can do in order to really get ahead.

So there's a lot of key takeaways that I want you to know. One is there's the free money, so grabbing the $1000 seed or the $250 Dell gift if you qualify. 2 is there's a $5000 per year cap, no job required, and it's mostly locked in until age 18.

Three, this works like a Traditional IRA, so growth in seed money or tax later, but again, we want to get that money into something like the Roth conversion window, especially during low income years and for college. Utilize a 529 plan.

Now. Those are the key takeaways when it comes to these Trump accounts and the ways that you can use them. I want you to understand though that when you are starting to think about this kind of stuff, I want you to focus on what is going to benefit you and your family so you do not contribute to these accounts before your own retirement account.

OK, We call this the oxygen mask method. First you need to take care of your own retirement. Then you can help out your kids. Because if you do the opposite, your kids are gonna have to help you in retirement, which is gonna cost more in stress and anxiety for them then would be if you just took care of your own retirement.

So you always, always, always make sure that you are hitting your retirement number first. Then you can help take care of your kids retirement capiche, Capiche. So what does that look like? OK, first you need to figure out how much you're want to have in retirement.

So let's say for example, that you want to make sure that you have $80,000 per year that you can spend in retirement. Well, what that tells me is that back in the napkin rough math, your portfolio needs to have $2,000,000 in it for you to be able to draw down $80,000 per year in retirement.

So once you are on pace to hit that $2,000,000 by the time you want to retire, then you can start to contribute to something like this. Then you can start to contribute money into accounts for your kids or future things. But you got to take care of yourself first. You got to take care of the big stuff first.

Now, if you're trying to figure out, OK, what order should I be considering when I am thinking about taking care of my stuff? Well, I'm going to leave a link down the below in the show notes that you can check out, which is called the Master Money Blueprint, which we just take you through step by step.

Hey, what should you do with your next dollar? What should you be thinking about with that next dollar? So you know how to take care of that because if you're new here, we're going to do a full episode on that coming up. But if you're new here, make sure you're following the podcast 'cause we have a full episode on that coming up as we go through this. So just want to make sure we say that at the end.

Now also for those of you out there who do not want to do a Trump account, I also contribute to a taxable brokerage account for my kids. I do this in a way where I open a a taxable brokerage account at Fidelity. And then what I do is I contribute $100 every single month, $1000 at birth, and I give them $250 every birthday and every Christmas.

You can do less than that. But what's gonna happen here is by the time they turn to age 18 in this taxable brokerage account, they're gonna have about $80,000 in the account, roughly. It's gonna be a little bit more, but about $80,000 in the account, OK. And if I do not touch the money and they don't touch the money, by the time they turn to age 65, they're gonna have $7.7 million in that account.

And this is me stopping my contributions at age 18, stopping fully. They'll have $7.7 million in that account after a 10% rate of return. You can really do some cool stuff for your kids and build a tremendous amount of wealth for your kids. But just starting early with small amounts of money, small amounts of money overtime can grow to a very large amounts of money.

And the more you understand that with your retirement, the more you understand that with your kids retirement, the more you understand that when you think about generational wealth and building this foundation for your family that is a stronghold where they will never be poor again, the faster you can really start to build some serious wealth.

This is a mindset shift. Half of this is just changing your mindset. And I know what it feels like. I know what it's like to be at the bottom and be living paycheck to paycheck and understanding that you can't put these pieces together. How do I get these pieces to fit together? Or maybe you're making really good money and you're like, I make super good money.

I'm making $150,000 per year, I'm making $250,000 per year, I'm making $300,000 per year and I'm still living paycheck to paycheck. Guess what? The stats don't lie. Over 50% of high earners live paycheck to paycheck and that could be you. So piercing all these pieces together is going to take 1A mindset shift 2, understanding the plan and the tactics of what you need to be doing and then three, executing for longer periods of time.

You got to be willing to put in the work. You've got to have the ability to put in the work so that you know what you need to do next. It takes a little bit of work, takes a little bit of elbow grease, but once you automate it and once to ensure that it is seamless, all of a sudden you have to worry way less about money.

And it just builds wealth on autopilot. And that's what I love about building wealth is once you have the principles down, you can automate everything and all of a sudden you're building wealth on autopilot. So if you are someone out there who feels as though you're lost with money and you don't know what to do next, you have this feeling of I know I can be better with my money then I would.

I would like to invite you to join Master Money Academy. Master Money Academy is our Academy that walks you through the 25 step system that we have called the Wealth Builders Journey that takes you through everything you need to know when it comes to building wealth.

And every single week I am on a live coaching call personally. It's not random people or coaches or other people. I've seen a lot of other communities where they have random people that go on those live coaching calls. No, it is me personally on those live coaching calls answering your questions every single week.

So I would like to invite every single one of you to join Master Money Academy. We're going to be doing some really cool stuff with Master Money Academy, adding some stuff there as well. And also we will be doing, I'm announcing this right now and we'll probably talk about this a lot more in the future. We're going to be doing some high level one-on-one coaching where if you want your finances transformed, you want to be on the path to making sure that you were going to be building that generation of wealth.

We're going to be doing some high level, one-on-one coaching. So that's going to be coming up. If you are interested in that high level one-on-one coaching where you're going to be meeting with me one-on-one, I will literally be going into your, I'm going to make you open a dashboard, a financial dashboard. I'm literally going to go into your finances with you. If you are interested in that, I want you to shoot me on emailandrew@mastermoney.co and let me know and I will have our team chat with you, OK?

So if you are interested in that, it is going to be intense. It's going to be one of those things where you got to be serious. If you want to do that with me, 'cause I don't play games, as you can see. And so if you are serious about building wealth and you're serious about getting to the next level, then I want you to. Shoot me an e-mail on that too, because it's not launched yet and nobody knows about it.

That's the first time I'm talking about it. I wasn't planning on talking about it right now, but I felt as though led to talk about that right now. So that is exactly you're the first. You know, if you e-mail me today, you're probably going to be one of the first people to get on that list to have the ability to to have a conversation about that.

So truly appreciate each and every single one of you. I truly appreciate you being here. My goal is to serve you. My goal is to bring you as much value as I possibly can. And I really hope we did that today with this episode. Again, building wealth for your kids is something that you do after you already have the rest of your finances in order.

This is one of those things though, that at least if you could take advantage of the free money, that's all you got to do. Just take advantage of the free money. Let that account ride. Forget about it if you don't want to contribute to this account again, but at least get that free money. Come on guys, get that free money and let's get it going. Well, thank you so much for being here on this episode.

Truly appreciate each and every single one of you and we will see you on the next episode.